Tehran, Iran ? To the West, Mahmoud Ahmadinejad is the most visible face of Iran – the bearded firebrand demanding nuclear rights, the end of Israel and a new accounting of the Holocaust.

To many Iranians, however, the president is a tool of the Islamic Republic’s ruling clerics and holds little real power. Foreign policy – nuclear strategy, Iraq plans, talks with the United States – is firmly in the hands of the reclusive circle led by Iran’s highest-ranking ayatollah, Supreme Leader Ali Khamenei.

Now, analysts say, those leaders are moving to curb Ahmadinejad’s domestic agenda. They’re fearful, many say, that his populist-style social programs will bankrupt Iran’s oil-fueled government.

These analysts warn that while the West is preoccupied with Ahmadinejad as Enemy No. 1, the issues that really matter – Iran’s proximity to Iraq, its nuclear ambitions and its support of Palestinian and Lebanese guerrillas – are better addressed through Iran’s true power brokers, whose recent comments have been more conciliatory than Ahmadinejad’s.

A small part of the puzzle

Last week, diplomats from the United States, Europe, Russia and China threatened Iran with U.N. action if it didn’t agree soon to suspend its uranium enrichment program.

“It’s important that the world understands he’s a very small part of this puzzle,” said Mohammed Atrianfar, founder of the main opposition newspaper, Shargh, and a leader of the reformist Kargozaran Party. “He’s like the thin, dry branch of a tree supported by the deep roots of the (state-controlled) media, the supreme leader and the radical clerics. For now, none of them will allow this branch to break.”

Since his surprise victory at the polls a year ago, Ahmadinejad has fascinated and appalled the West. He’s questioned whether the Holocaust happened and called for Israel’s end. He’s often portrayed as backward, loony or both – certainly not one to be trusted with the bomb.

But he’s also wildly popular among workaday Iranians weary of a cleric-led regime that’s often viewed as corrupt and incestuous. The son of a blacksmith and the former mayor of Tehran, Ahmadinejad is the first non-cleric to hold Iran’s presidency since the early days of the 1979 revolution.

Ahmadinejad’s initiatives include government loans for small-business owners, higher salaries for government workers, debt forgiveness for farmers, low-interest loans for first-time homeowners and credit priority to young newlyweds. He’s also earmarked money for community development, bringing new stadiums and schools to far-flung regions of this nation of 70 million.

Reliance on oil spurs fears

But economists warn that those actions are possible only because the price of oil is above $70 a barrel. While the world’s current turmoil promises to keep the price high, economists worry that the price could eventually drop. That would be disastrous in a country where millions – factory workers, soldiers, paramilitaries and bureaucrats – rely on the government for their livelihoods.

“The whole stability of the regime is tied to the price of oil,” said Saieed Laylaz, an economist in Tehran who says Iran is five times more dependent on its petroleum industry than it was five years ago. “They inject the oil revenues directly into society. This stability you see is like a bubble. They are able to keep everyone silent only because of petrodollars.”

That reality hasn’t gone unnoticed by the powerful clerics who rule Iran from the shadows. One senior Iranian government official said the ayatollahs in Qom, the holy city where they’re headquartered, have asked the supreme leader to curb the president’s spending. Chief among their fears, observers say, is the threat of wealthy government-backed apparatchiks losing their monopoly on Iran’s banking, insurance and other lucrative state-run institutions.

Lest Ahmadinejad forget who’s really in charge, a reminder came last month when he made the surprise move of allowing women into soccer stadiums. He was reversed almost instantly after influential clerics complained to Khamenei, the supreme leader.

Iran’s educated, politically moderate class, meanwhile, is deeply embarrassed by Ahmadinejad’s lack of statesmanship and cringes over him becoming the most public face of Iran, where citizens take great pride in their thousands of years of civilization.

Some opposition figures grumble that his appearance on the covers of Western news magazines shows that the West doesn’t understand his true stature.

Even some of the president’s staunchest supporters say his inflammatory comments have helped Iran’s enemies justify their efforts to keep the country isolated as a pariah.

“Mr. Ahmadinejad is a person of logic, very intelligent, brave, revolutionary and hardworking, a believer in peace,” said Hamid Reza Taraghi, whose hard-line Islamic Coalition Society advises the president. “But the West portrays him as an extremist, a radical against peace, a warmonger, someone who doesn’t believe in diplomacy.”

No topic has gotten Ahmadinejad more attention than Iran’s nuclear program, which Iranian officials rejuvenated after he took office. The president wisely cast the debate surrounding Iran’s enrichment of uranium as a populist issue that gets to the very heart of sovereignty and perceptions of Western double standards on nuclear rights – namely, if Israel can assemble an undeclared nuclear arsenal, why shouldn’t other countries in the region pursue atomic development?

The gamble paid off at home, where even many of his opponents support Iran’s right to peaceful nuclear development.

A willingness to negotiate?

Meanwhile, analysts say, statements from Iran’s real leaders show signs of softening and a greater willingness to return to the negotiating table. Iran’s chief nuclear negotiator, Ali Larijani, and the Iranian foreign minister, Manoucheh Mottaki, are urging their counterparts in the West to buy into a program that allows Iran to continue enrichment activities at a very low level and under greater international supervision.

“Their previous harsh position has started to water down, but on the other hand, Ahmadinejad’s radical position is the same,” said Davoud H. Bavand, a political analyst. “Mr. Larijani makes one kind of statement here, then Mr. Mottaki makes another one, and then the supreme leader makes a statement that goes even farther. From the beginning, it was not Mr. Ahmadinejad making these decisions and it will not be so now.”